Changes in accounting estimates are:
A)Considered accounting errors.
B)Reported as prior period adjustments.
C)Accounted for with a cumulative "catch-up" adjustment.
D)Extraordinary items.
E)Accounted for in current and future periods.

Question

Quizplus · Accepted Answer

Changes in accounting estimates are adjustments to a company's accounting policies that reflect new information or changes in circumstances. These changes are not considered accounting errors, and they are not reported as prior period adjustments or extraordinary items. Instead, they are accounted for in current and future periods through a cumulative "catch-up" adjustment. Therefore, the best choice is E.

Changes in Accounting Estimates Are